Decomposition analysis of the impact of economic growth on ammonia and nitrogen oxides emissions in the European Union

This study investigates the environmental consequences of economic growth. Global environmental problems tend to aggravate along with global economic development. A number of harmful chemical compounds are being emitted into the air every day. An econometric model describing the influence of GDP per capita growth, foreign trade intensity and the volume of primary energy consumption on NOx and NH3 emissions is estimated in the paper. The data on the 28 EU countries is analyzed. The main findings support the EKC hypothesis. The relationship between per capita income and emissions of both NOx and NH3 falls into the EKC pattern. The estimation results on international trade intensity influencing the emissions are insignificant. The growth of primary energy consumption increases the emissions of both gases. This effect is greater for NOx since power plants are among the most significant sources of its emission. Given that the primary energy consumption in the EU continues to grow, there is a risk of further emissions growth in the energy sector, which should be taken into account by policymakers.